Equity Bank Achieves Record Non-Branch Transactions As it Targets Full Digitization

Equity Bank CEO, Dr. James Mwangi

Equity Bank CEO, Dr. James MwangiEquity Bank has announced its financial performance for the first quarter of 2018. For the most part, the bank, which has since been crowned the top financial institution in the country, attributes its latest gains to digitization of its operations via internet and agency banking operations.

The bank has reported a 75 percent jump in mobile banking compared to what it registered for the first quarter of 2017. That is a significant improvement for a customer base that would otherwise incur extra charges for convenience (via mobile or agency banking) rather than spend more time at branches.

Of particular interest is the number of transactions that were conducted outside the branches. The quarter under analysis registered up to 108 million transactions via Equitel (STK) and Eazzy Banking service. The offerings of internet-based banking services and fintech innovations were equally instrumental in bolstering financial performance, especially diaspora remittances that hit KES 18 billion up from 3 billion reported in the same quarter of the preceding financial year.

Mobile app adoption rate (Eazzy Banking app) grew by 35 percent during the quarter.

Equity’s ascent to full digitization by mid-2018 (hopefully) continues to illustrate progress, and immediate inferences can be made from the volume of transactions that take place outside the bank. Unsurprisingly, branches processed 3 percent of transitions, a 1 percent drop from the preceding quarter. The rest of transactions take place outside bank branches, which is to say agency and internet-powered banking have markedly ballooned.

To put the above assertions into perspective, the bank processed all transactions via its branches barely four years ago. It also means people prefer to keep their money in digital form.

At the moment, the bank says branches are mostly used to serve corporate customers, SMEs and carrying out value-added functions.

“While the high-volume transaction activity moved from the branches to alternate channels, branch productivity was enhanced with branch staff focused more on higher value-added services and cross selling the Group’s products and services to SMEs and Corporates while enhancing client relationship management and customer experience,” reads a statement from the bank.

Fintech innovations, a common buzzword that has engulfed financial services in the country, are still being pursued by the bank. For instance, the lion’s share of loans is being requested and deployed via mobile services. More precisely, 92 percent of loans are mobile-based. The rest are processed at branches. However, the volume of branch loans cannibalizes mobile loans at 77 percent.

Agency banking processes almost KES 60 billion (higher deposits than withdrawals), with almost 300,000 transactions per day. On the other hand, about 600,000 transactions are performed on the Eazzy Banking app.

The conclusion from today’s investor briefing is that the bank is edging close to achieving full digitization as it aims to cut costs and laud the convenience of timely transactions via non-branch channels.